Klemka v. Health Network Labs.

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ANDREA KLEMKA, Plaintiff, v. HEALTH NETWORK LABORATORIES L.P., t/a HNL LAB MEDICINE, Defendant.

Civil Action No. 21-2167

United States District Court, E.D. Pennsylvania

May 23, 2023

MEMORANDUM OPINION

EDWARD G. SMITH, JUDGE

The paramount issue before the court is whether an employer can defend itself from liability for interfering with an employee's right to take leave under the FMLA by asserting that it reasonably, honestly, and in good faith believed that said employee was violating the employer's leave policy by holding outside employment during the period of leave. In other words, is the affirmative defense of honest belief available in an FMLA interference case, which does not involve discrimination, as it is in an FMLA retaliation case, which does involve discrimination?

The plaintiff in this case worked as a medical laboratory technician for the defendant. At the start of the COVID-19 pandemic, the plaintiff received authorization to take FMLA leave out of a concern that the virus could exacerbate her permanent heart condition. While on leave, the plaintiff assisted her husband with his meal preparation company, which a local news station ended up showcasing in a segment. Upon seeing the news story, the defendant determined that the plaintiff had violated company policy by holding employment during her FMLA leave. Accordingly, the defendant terminated the plaintiff's employment mid-leave. The plaintiff subsequently sued the defendant for interfering with her rights under the FMLA.

Prior to trial, the court permitted the defendant to assert as an affirmative defense that it reasonably, honestly, and in good faith believed that the plaintiff had been employed by her husband's company while on FMLA leave. Moreover, while charging the jury, the court informed it that if it found that the plaintiff had been entitled to FMLA leave, it must also necessarily find that the defendant had interfered with the plaintiff's leave, given that the defendant had undoubtedly terminated the plaintiff during her leave.

At the end of a three-day trial, the jury found that the plaintiff had been entitled to FMLA leave and that the defendant had interfered with said leave. The jury also found that the defendant had not proven that the plaintiff had actually held employment while on leave. Nevertheless, the jury found that the defendant had proven that it reasonably honestly, and in good faith believed that the plaintiff had held employment. Thus, based on this affirmative defense, the jury found in favor of the defendant and this court entered a corresponding judgment for the defendant.

Both parties have now filed post-trial motions. The plaintiff's motion asks for (1) renewed judgment as a matter of law under Federal Rule of Civil Procedure 50(b) (2) an alteration or amendment to the judgment under Federal Rule of Civil Procedure Rule 59(e), and/or (3) a new trial under Rule 59(a). The plaintiff's primary argument in her motion is that the court erred in allowing the defendant to assert honest belief as an affirmative defense. Meanwhile the defendant's motion asks for (1) renewed judgment as a matter of law under Rule 50(b) and/or (2) a new trial under Rule 59(a). The defendant predicates its motion on both the sufficiency of the evidence and the soundness of the court's decision to instruct the jury to find interference if it found FMLA entitlement. Both parties have responded to each other's respective motions, rendering them ripe for adjudication.

Ultimately the court must grant in part the plaintiff's motion, as the court's previous holding that the defendant could assert honest belief as a defense against an FMLA interference claim was in error. Indeed, upon reexamining the plain language of the FMLA's enforcement section, the court concludes that Congress intended for such a defense to only protect employers from liability for liquidated damages, rather than all possible damages for unlawful interference under the FMLA. Accordingly, the court will vacate the judgment entered for the defendant and strike from the court's consideration the jury's finding regarding the defendant's reasonable, honest, good faith belief insofar as said finding pertains to all possible damages other than liquidated damages. The court will, however, continue to take said finding under advisement regarding liquidated damages. The court will also order a new trial on the limited issue of damages. That being said, the court will deny the plaintiff's motion for renewed judgment as a matter of law because Rule 50(b) motions must not concern pure questions of law, e.g., whether the honest belief defense should apply to interference claims.

At the same time, the court must deny the defendant's motion in its entirety. For one, the jury had more than sufficient evidence before it to find that the plaintiff suffered from a serious health condition that entitled her to FMLA leave. Furthermore, the court did not err in its instruction as it pertained to the jury's finding of interference because when an employee is entitled to FMLA leave, provides proper notice to take said leave, and is terminated while on said leave, interference has by definition occurred. Thus, the court's instruction to the jury was legally sound.

I. FACTUAL BACKGROUND & PROCEDURAL HISTORY

On May 12, 2021, the plaintiff, Andrea Klemka (“Klemka”), initiated this action against HNL Lab Medicine a/k/a and f/k/a Health Network Laboratories L.P. (“HNL”), Health Network Laboratories L.L.C. (also “HNL”), Joshua Kubat (“Kubat”), and Julia Barto (“Barto”). See Doc. No. 1. The complaint contained three counts brought under the Americans with Disabilities Act (“ADA”) and the Family and Medical Leave Act (“FMLA”): (1) violation of the ADA, (2) violation of the ADA-retaliation, and (3) violation of the FMLA-interference, retaliation/discrimination.^[1] See Compl. at ¶¶ 42-51, Doc. No. 1. The defendants responded to the complaint with a motion to dismiss for failure to state a claim. See Doc. No. 5. In response, Klemka filed an amended complaint, in which all defendants and counts remained the same. See Doc. No. 6. The defendants again filed a motion to dismiss, see Doc. No. 8, which the court denied on September 10, 2021. See Doc. No. 11.

Following four months' discovery, the defendants filed a motion for summary judgment on all claims raised in the amended complaint. See Doc. No. 20. At the same time, Klemka filed a motion for partial summary judgment on her FMLA interference claim and a permanent injunction against the application of certain HNL human resource policies. See Doc. No. 21. The factual record developed in support of these respective motions indicated the following^[2]:

Klemka worked for HNL-a medical laboratory-as a laboratory technician for six years, starting in 2014. In April 2020, at the beginning of the COVID-19 pandemic, Klemka requested a leave of absence under the FMLA, citing her heart issues as increasing her risk of adverse outcomes from a COVID-19 infection.^[3]HNL ultimately granted Klemka a leave of absence from mid-April to mid-June. During her leave, Klemka began helping her husband, Dean Giannakis (“Giannakis”), with his meal preparation company, which Giannakis would display on social media posts. Eventually, Klemka and Giannakis appeared on a local news segment to discuss the meal prep company, during which a reporter referred to the two as “business partners.” Hearing of this segment, Kubat and Barto investigated whether Klemka had violated an HNL company policy that prohibited outside employment during a leave of absence. Upon concluding that Klemka violated this policy, HNL terminated her employment.

A crucial component of both parties' motions was a disagreement over whether an employer can defeat an FMLA interference claim by asserting that it reasonably, honestly, and in good faith believed that a plaintiff misused or failed to use FMLA leave for its intended purpose (the “honest belief defense”). Citing two nonprecedential opinions by the Third Circuit Court of Appeals, the defendants argued that such a belief was a proper defense. See Defs.' Br. in Supp. of Their Mot. for Summ. J. at 25-29, Doc. No. 20-8 (citing Warwas v. City of Plainfield, 489 Fed.Appx. 585 (3d Cir. 2012); Parker v. Verizon Pa., Inc., 309 Fed.Appx. 551 (3d Cir. 2009)). Accordingly, because the defendants purportedly had grounds to reasonably believe that Klemka was employed by Giannakis's company, they maintained that the court should enter judgment in their favor on her interference claim. See id. at 30. On the other hand, Klemka argued that the honest belief defense is only viable in an FMLA retaliation case, not an interference case, because an employer does not carry any burden of proof in the former. See Pl.'s Mot. for Partial Summ. J. and for Permanent Inj. at 11-13, Doc. No. 21-2. Ultimately, this court entered an order denying the cross-motions for summary judgment. See Doc. No. 36. The case then proceeded to a jury trial.

The trial commenced on October 11, 2022, at which time HNL remained the sole defendant and interference remained Klemka's sole claim.^[4] Before opening statements, the court held that HNL could assert the honest belief defense against Klemka's FMLA interference claim. In doing so, the court expressed some hesitancy, noting that the plain meaning of the FMLA's statutory text did not appear to support the existence of such a defense. See 29 U.S.C. § 2617(a)(1) (overviewing liability for FMLA interference). Nevertheless, because the Third Circuit had issued two nonprecedential opinions permitting the defense in an FMLA interference case,^[5]both of which it then cited in a footnote of a precedential opinion, see Capps v. Mondelez Glob., LLC, 847 F.3d...